Charts show Tesla losing market share amid California’s booming EV sales

Sales of electric vehicles in California soared to a new high in early 2023, accounting for more than 21% of all new vehicles sold in the Golden State so far this year.

The portion of the new vehicle market composed of EVs — which include fully electric, hydrogen fuel cell and plug-in electric hybrid models — has more than doubled over the last two years. Electric models were less than 8% of the state’s new car market in 2020, according to vehicle registration data from the California Energy Commission.

California has long dominated the electric car market in the United States due to aggressive tailpipe regulations designed to phase out emissions that are known to harm human health and drive global climate change by trapping heat in the atmosphere.

But the state is only at the start of what’s likely to be a rapid transition. The number of clean cars is expected to grow exponentially due to a regulation that requires most new cars sold in California to be zero-emission by 2035.

Tesla is, without question, the dominant player in the market. It has been the top-selling EV brand since 2018. Moreover, the company’s Model 3 and Model Y are now the top-selling new cars in the state, far outselling the top three most popular gas-powered models (Toyota’s RAV4, Camry and Corolla, according to the California New Car Dealers Association).

That said, Tesla has seen its market share drop in recent months, particularly as it faces growing competition from other manufacturers in the clean car space, including BMW, Chevy and Jeep.

Drivers are most likely to own an electric vehicle in the Bay Area, especially in wealthy enclaves of Silicon Valley, where most people live in single-family homes. San Mateo County had the highest per capita rate of electric sales last year, with 21 EVs sold per 1,000 residents. Meanwhile, Santa Clara County had the highest percentage of new cars sold that were EVs, with 34%.

Electric cars were about 2% of the new car market in California a decade ago. Sales slowly grew until 2018, when the mass release of Tesla’s Model 3 changed the game. Sales have soared in the years since, thanks to a host of factors, including sky-high gasoline prices, more variety in electric models, strong government subsidies for buyers and less consumer hesitancy. Electric vehicles now account for more than 21% of the market.